Through the first four months of 2013, the top five metropolitan areas in terms of the dollar amount of new multifamily starts were the following: New York City, Miami, Boston, Washington, D.C., and Los Angeles.
Nonresidential Building
Nonresidential building in April grew 6% to $144.3 billion (annual rate), showing improvement after a weak March, although still 7% below its average monthly pace during 2012. The commercial segment in April was mixed by project type.
Office construction climbed 58%, lifted by the start of the $400-million Prudential Financial Office Tower 1 in Newark, N.J. Store construction in April increased 5%, helped by groundbreaking for such projects as a $46-million shopping center in the Bronx, N.Y., and a $40-million outlet mall in West Palm Beach, Fla.
On the negative side, warehouse construction in April fell 11%, even with the start of a $70-million distribution center in Bethel, Pa., while hotel construction dropped 9%. Manufacturing plant construction, which can be volatile on a month-to-month basis, decreased 49% in April. Despite the decline for the category as a whole, manufacturing plant construction did include the April start of a $290-million diesel refinery in North Dakota.
The institutional segment of nonresidential building was also mixed by project type in April. The largest percentage gain was reported for transportation terminals, which jumped 238%, with the upward push coming from $258 million for terminal work on the Second Avenue Subway line in New York City and $100 million for renovation work on Terminal A at Dallas-Ft. Worth International Airport.
Health-care facilities strengthened in April after a weak March, rising 48% with the aid of such projects as an $830-million Stanford University medical center in Palo Alto, Calif., and a $226-million Emory University treatment center in Atlanta. Amusement-related work advanced 6% in April, supported by groundbreaking for the $169-million casino portion of a $400-million casino and garage project in Baltimore.
Educational facilities, the largest nonresidential building category, dropped 19% in April. The latest month did include the start of a $100-million high school modernization in Washington, D.C., but this was not enough to avert another decline for educational facilities. Weaker activity was also reported in April for public buildings (courthouses and detention facilities), down 17%; and churches, down 27%.
The 5% decline for total construction starts on an unadjusted basis during the first four months of 2013 reflected a steep 33% drop for nonbuilding construction. Although the public works portion of nonbuilding construction was up 10% year-to-date, electric utilities were down 78%. The first four months of 2012 saw an exceptional amount of large electric-utility projects reach the construction start stage, led by two nuclear projects—$8.5 billion for Units 3 and 4 at the Vogtle nuclear power facility in Georgia and $8.5 billion for Units 2 and 3 at the V.C. Summer nuclear power facility in South Carolina.
Additional large electric-utility projects that reached the construction start stage in the first four months of 2012 included a $1.3-billion, gas-fired power plant in Florida, a $1.1-billion gas-fired power plant in Virginia, and a $1.1-billion solar energy complex in California. New electric-utility starts achieved a new high in current dollar terms during 2012 and are now pulling back from last year’s record pace. As noted, if electric utilities are excluded from the construction start statistics, then total construction during the first four month of 2013 would be up 12%.
Residential building during the January-April period of 2013 climbed 33% relative to last year, with similar gains for single-family housing, up 33%; and multifamily housing, up 34%. Nonresidential building during this year’s January-April period fell 8%, weighed down by a 14% drop for the institutional categories. Commercial building on a year-to-date basis showed no change from last year, while the manufacturing building category was down a slight 1%.
In terms of geography, total construction starts in the first four months of 2013 revealed gains in three regions—the Northeast, up 12%; the South Central, up 10%; and the West, up 6%. Year-to-date declines were reported for two regions—the Midwest, down 1%; and the South Atlantic, down 31%. If electric utilities are excluded from the construction start statistics in the South Atlantic, then that region would register a 22% year-to-date gain.